Oracle stock (ORCL) took a significant dip on Thursday due to concerns over its heavy investment in AI and a disappointing Q3 earnings report. At the same time, Oracle reported revenue of $16.06 billion for its fiscal second quarter, up 14% from the previous year but lower than the $16.21 billion projected by analysts tracked by Bloomberg. While the mixed earnings were solid, it was the company’s announced AI spending plan that scared some Wall Street experts.
Oracle reported capital expenditures of $12 billion for its fiscal second quarter after the bell on Wednesday, up from about $4 billion the previous year and the roughly $8 billion projected by analysts tracked by Bloomberg. The AI cloud company also hiked its guidance for full-year capital expenditures to $50 billion from its prior $35 billion estimate.
The fears of increased AI spending trickled into other AI stocks on Thursday as well, with Nvidia (NVDA) and AMD seeing slight dips. Analysts eyed the Oracle report as a potential boom-or-bust catalyst for AI stocks to kick off 2026. Several AI-related cryptocurrencies also experienced declines, with some dropping over 7% in a day. “We expect Oracle’s fiscal Q2 earnings to be another significant event, particularly as sentiment for the AI infrastructure market has turned more negative in recent months from elevated AI bubble fears and financing concerns for both Oracle and key customers (OpenAI),” Barclays analyst Raimo Lenschow wrote earlier this week.
However, the fear of increased spending dedicated to AI efforts appears to have done the opposite and reignited AI bubble concerns. Oracle’s stock decline on Thursday marked ORCL’s biggest daily loss since January 2025. The shares remain up over 19% YTD, however those gains could be nearly erased by the start of 2026.